In every economy, defence industry is the most important one and a lot of budget is always being spent on this industry. There exists significant empirical research studies which has investigated the role of defence industry in the economic growth of the countries. The analysis of such research studies tell that such studies are being organised in the developed countries and developing countries have received less attention. Dunne and Tian, (2013) has also asserted that there is lack of empirical research studies regarding the impact of defence industry on economic growth of developing countries. As said by Mintz and Stevenson (2016), the defence industry is considered as the industry in which we have to spend significantly as this is necessary for protecting the countries from external and internal threats. Most of the times, countries spend the money which is in excess of legitimate security requirements. Doing this results in few resources which are available to be spent on wellbeing and poverty alleviation in an economy.  Likewise, the excessive spending in the defence industry of a country protects the ineffectual regimes while the democratic governance along with the sustainable development of the economy are compromised (Farzanegan, 2014). Therefore, this research intends to minimise the gap which exists in the literature regarding this research issue.

1.1.Research aim and objectives

The aim is to explore how the development of the defence industry influences the economy of a country. Turkish economy will be examined in this research. This research will have following research objectives.

• To critically review previous studies about the role of defence industry in an economy
• To evaluate how development of defence industry has influence on the economic growth of Turkey.

1.2.Research rationale

The rationale for conducting this research is that even though there are empirical studies conducted in the context of developed countries, it is still know known how it has influence on the economy as there is lack of consensus about the association of development of defence industry and economic growth. Moreover, developing countries like Turkey are not explored fully as how spending in this sector are better/worse for economic growth of Turkey (Yuan et al., 2016).

2.Literature review

In previous literature both empirical and theoretical, government expenditure and economic growth are studied in an extensive manner. Empirically, there exists controversies regarding how it promotes economic growth. Theoretically, it is said that government spending is beneficial for the economic growth of a country (Okoro, 2013; Pradhan, 2010). It is said by Keynsian school of thought that increased government spending leads towards the increase in the aggregate demand which proves beneficial for economy as it increases the output and employment through the multiplier effect (Feridun et al, 2011). On the other hand, the studies which are based on neoclassical school of thought tells that the increased spending by the government is negatively associated with the economic growth of a country (Okoro, 2013). As told by Chipaumire et al. (2014), and Korkmaz (2015), when government increases the spending, it is associated with the decrease in investment at private level, lower level of domestic savings and decreased consumption owing to the decrease in aggregate demand. So in this manner, when government increases its spending, it leads towards the hike in interest rates which can actually crowd out the investment by private parties hence there is a negative impact on the economic growth (Feridun et al, 2011). Various studies has been conducted in the context of different economies (i.e. United States (Liu et al., (2008), India (Ranjan and Sharma (2008) and Thailand (Komain and Brahmasrene, 2007)).  They have presented variant conclusions, so there exists inconclusive findings in the literature about the role of spending in defence industry in economic growth.

Like this, there are different views which are hold by different authors regarding the spending on defence industry and its impact on the economic development. There are three groups of authors which could be found in the literature. As per the views of first group, everything that is spent on the development of defence industry is mandatory as it is needed for peace, social welfare and security (Islam, 2015). Such studies are based on the Keynesian notion where it is believed that there exists significant relationship among government expenditure on defence industry for its development and economic growth (Komain and Brahmasrene, 2007; Ranjan and Sharma, 2008; Yidirim et al. 2011). Basically, it is due to the spill over effects of the spending which influences the entire economy in a positive manner.

One empirical study was also conducted in China where linear models were used and the researchers use the linear models for examination of relationship which exists among defence industry development and its influence on economic growth in the context of China. The results has confirmed that during the time period of 1995 and 2000, spending on military industry proved good for the economic growth of China. The other group of scholars is of those researchers which believe that when government increase its budget for development of defence industry, it is something which is not useful as it does not gives returns beyond the resources which are utilised on this (Mosikari and Matlwa, 2014). Basically, such research studies has asserted that defence development in any economy does not prove good for the economic growth of the country. Many studies has proved this aspect; examples of such studies are Shahbaz et al., (2013), Yang et al. (2011) and Abu-Bader and Abu-Qarm (2003). The research study of Dunne and Tian (2013) could not be overlooked. That research study was based on 106 countries and it relied on data which was collected in the time periods of 1998-2010. This research study has concluded that spending by the government on the development of defence industry is negatively related with the economic growth both in short and long run. Likewise, the study of Shahbaz et al. (2013) has also found that the development of defence industry does not prove favourable for the economic growth of Pakistan which is also a developing country. One of the previous studies which was conducted in South Africa among 1964 and 1996 has also found that military spending is linked with the poor economic growth (Dunne and Vougas, 1999). Likewise, Oriavwope and Eshenake (2013) also found similar results when the research study was based in Nigeria. It is expected that in Turkey which is also a developing country, the spending on defence industry is associated with the economic development in a negative manner.

The third group of research studies consist of those research studies where it is found that there is no link among the expenditure on development of defence industry and growth of the economy. In one of the earlier studies, it was reported by Biswas and Ram (1986) that the defence development and economic growth are not associated with each other in a significant manner. Likewise, Heo (2010) conducted the research study in United States of America and used the statistical analysis named auto-regression analysis. This research also proved that there exists no as such casual relation among defence development spending and economic growth. Huang and Mintz (1990) conducted the similar research study in context of US where data was being collected in the period of 1952 and 1988. There were a wide range of applied ridge regression models which were performed in this research study. The research study also reported that there is insignificant association among these two variables. Another study considered sixty two countries for the same analysis and it was found that there exists no relationship among them (Dakurah et al., 2001).

Form the above literature, it could be examined that there exists mixed findings and it is not reasonable to conclude any one statement about the relationship which exists among development of defence industry and the economy of Turkey. Moreover, there exists a literature gap regarding the research findings about the defence spending and economic growth in the context of this developing country named Turkey (Yuan et al., 2016). Therefore, this research aims to analyse this relationship in the context of developing country so that it could be concluded in a certain manner that how development of defence sector of a country could have an influence over the economic growth of Turkey.

2.1.Hypotheses development

H₀: There exists no relationship between defence industry development and economic growth of Turkey.

H_1A: The defence industry development has a positive impact on the economic growth of Turkey.

H_1B: The defence industry development has a negative impact on the economic growth of Turkey.

 

 

3.Methodology

This section sheds light on the research methods which are selected for this research. The purpose of this section is to explain and justify how this research study will be completed.

3.1.Research philosophy

AThis research will be based on the positivism research philosophy. According to this philosophy, it is believed that knowledge has its foundation on natural phenomena, its properties and relations. The certain knowledge is based on that information which is derived from the sensory experience and has potential to be interpreted on the basis of logic and reason (Tharenou, Donohueis and Cooper, 2007). The data which can be verified and has been derived from the human senses is also known as empirical evidence. So basically this philosophy is selected to get the empirical evidence about the impact of development of defence industry of the economic growth of Turkey. Further to this, the studies in which researchers use this positivist philosophy are the ones where for gaining knowledge, objective scientific methods are used (Sekaran and Bougie, 2010). Therefore, this research philosophy uses the quantitative data and it is norm in such studies to use this quantitative data which can be measured and verified. Sekaran (2003) has told that such studies has higher chances of ensuring that data which is used in the research study is valid and reliable, therefore, findings of the study can also be generalised to other context and whole population. These important factors about this research philosophy has motivated the researcher to use the positivism research philosophy where the intention is to find out how development of defence industry of Turkey is influencing the economy of this developing country.

3.2.Type of investigation

Saunders, Lewis and Thornhill (2012) told that there are three types of research investigations which are used by the researchers in the social sciences and these are named descriptive, correlational and inferential. The descriptive research studies only collect the data and describe the factual information while correlational studies intends to find out simple association among variables which are under investigation. On the other hand, inferential research studies test the cause and effect relationship among the variables (Remenyi et al., 1998). The present research will be the inferential type of the research where the intention is to test the cause and effect relationship among defence development and economic growth of Turkey. This research type will enable to test the hypotheses of this study which are developed after reviewing the literature relevant to the research topic.

3.3.Research methods

According to Ramamurthy (2011), there are two types of research methods which can be adopted by the researcher as per the feasibility for the research aim and objectives. For exploring how the defence industry could have an influence over the economy, it is decided to use the quantitative research methods as it will help to achieve the research aim and objectives in an effective manner. Along with this, there are certain aspects about the quantitative research methods which has convinced the researcher to rely on quantitative research methods in this research (Kumar, 2005;1999). The quantitative research methods based studies are completely based on data driven and there is no space for personal opinion of the researcher hence the findings of the research study are considered more objective. The research findings cannot be criticised due to the element of bias of the researcher (Matthews and Ross, 2014). There is no role of emotions hence better predictions about the future of economy of Turkey could be made on the basis of spending which will be done on defence development in Turkey. More importantly, the reliability and validity of quantitative data could be assessed and reinforced in the analysis, which tells that there is greater level of generalisability of the results.

3.4.Data measurement

This research is based on two variables i.e. development of defence industry and economic growth. For measuring development of defence industry, the data about the government spending on military will be used. For measuring the economic growth, GDP growth rate will be used as the proxy.

3.5.Data analysis

In this research, it is decided that statistical tests will be used for determine the cause and effect relationship which exists among the development of defence industry and economic growth in Turkey. For data analysis, it is planned to use E-views as that is the most commonly used software for statistical tests which are performed in the similar studies.

3.6.Time horizon

This research will be based on the cross sectional time horizon for analysing how development of defence industry on economic growth of Turkey. The time period for data collection will be 2005-2015.

3.7.Ethical considerations

As suggested by Gray (2013), this research will ensure that all of the ethical standards which are relevant for doing the research are considered while completing this research. This is based on secondary data so all relevant ethics for secondary data will be used. It will be ensured that data fabrication of any kind is avoided during the analysis. Data will be collected form authentic sources and source of data will be given acknowledgement for the data.

4.Data sources

The data which can be used for empirical analysis is either primary or secondary. It is decided that this research will be based on secondary data source. The secondary data is second hand data which is available in different data bases. The rationale for selecting secondary data source is that it is more feasible as per the research aim and objectives (Goodwin, 2002). Moreover, previously conducted research studies on similar research issue has also considered secondary sources for empirical analysis. As previously mentioned, the data which will have to be collected in this research will be about the total government spending on military and GDP. The data base of World Bank will be used for accessing the secondary data for this research.

5.Project Plan and Timescale

In this research, everything will be as per the plan which is developed for completing this research in an effective and timely manner. The research will be completed in four months (i.e. one semester). The following GANT chart will help to guide in completion of the dissertation in a timely manner.

5.1.GANT Chart

Activity title	Description	First Month	Second Month	Third Month	Forth Month
Introduction	The first chapter will be completed which will set background, aim and objectives. It will also highlight importance and value of this research.
Review Literature	The secondary data will be collected and will be analysed. After this, chapter two i.e. literature review will be written.
Methods designing	Details about the methods will be decided. Everything about data and methodology will be determined here.
Collection of data	Data will be collected from data base.
Data coding	Data will be coded into statistical software i.e. E-Views.
Data analysis	Data will be analysed through statistical tests.
Findings and analysis	The findings and analysis chapter will be written.
Discussion, Conclusion and Recommendation	Discussion will be done and the research will be concluded.
Final editing	The formatting of dissertation, proofreading and necessary revisions will be done.